• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 4 hours WTI @ $75.75, headed for $64 - 67
  • 2 hours The Dirt on Clean Electric Cars
  • 16 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 9 hours Uber IPO Proposals Value Company at $120 Billion
  • 2 hours Trump vs. MbS
  • 7 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 16 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 13 hours COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 10 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 3 hours Coal remains a major source of power in Europe.
  • 3 hours EU to Splash Billions on Battery Factories
  • 12 hours Nopec Sherman act legislation
  • 5 hours Poland signs 20-year deal on U.S. LNG supplies
Al Fin

Al Fin

Al Fin runs a number of very successful blogs that cover, energy, technology, news and politics.

More Info

Trending Discussions

Can Russia Afford to Cut Itself off from Western Oil Companies?

“For foreign oil companies seeking to expand production and reserves, Russia is now off limits,” Robbert Van Batenburg, head of research at Louis Capital Markets LP in New York, said in a telephone interview yesterday. The BP accord “is probably scaring the others away ...”

Since 2004, Putin has been tightening the government’s grip on the Russian oil sector, moves that made it increasingly difficult for foreign producers to establish or maintain footholds in the country, said William J. Andrews, a fund manager at C.S. McKee & Co. in Pittsburgh....

“The Russians are nationalistic and are going to keep the oil reserves for themselves,” said Andrews, who helps manage $14 billion. “They don’t really have a legal system or a political system. It’s a dictatorship.”

...“Ten years ago, Russia was a much more open place to do business,” Molchanov said. “But that is no longer the case, thanks to Vladimir Putin. The international oil companies are having to look elsewhere for opportunities at a time when the set of opportunities is growing more limited and costly.” _BW

But is Russia -- with its neolithic infrastructure and shrinking ethnic Russian population -- in a position to cut itself off from western expertise and the technological advances that are occurring at a rapid pace in the western world? Is this the same phenomenon of a hubris born of backwardness that brought down the Soviet Union?

Russia's Putin has been banking on rapidly rising oil prices. But more and more western analysts -- including Citi and Goldman -- believe that global oil prices will stabilise near present levels through 2020, and possibly beyond. To finance his ambitious military, nuclear, and technological goals, Putin needs for oil prices to approach $150 a barrel. As long as prices stay near $90 levels, Putin must either restrain his ambitions, or draw down his dwindling reserves.

Related Article: Oil Still Calling the Cards in Mideast

If Putin refuses to open Russia to outside investment and infrastructure upgrades, he is limiting himself to more devious methods of supporting his grandiose goals for Russia. Methods which include starting proxy wars in and around the middle east to increase the geopolitical risk premium of oil -- driving up global oil prices.

It is a type of "painting oneself into a corner," which appears to be a common character failing of Russian leaders down through history.

Between Russia's core population collapse, its disintegrating public health infrastructure, a debilitating brain drain, and the steady drip, drip, drip of capital flight outside the country -- more intelligent and wise Russians must understand the desperate need for a change in direction.

With Putin at the helm, Russia sails perilously through hazardous straits.

By. Al Fin


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News